Steve Worthington

An analysis of main and subsidiary credit card holding and spending

Purpose – This study seeks to examine why most multiple credit cardholders have a “main” card (i.e. a card used more often than others) and “subsidiary” cards (i.e. cards used less often or only in an emergency) and the spending patterns associated with main and subsidiary cards.Design/methodology/approach – The study is qualitative in nature, using a survey which contained open‐ended questions to acquire data. Responses were subject to content analysis to categorise the reasons given for having a main and subsidiary card.Findings – Results show that some 85 per cent of the 141 respondents indicated that they had a main card and the most frequently quoted reason for having such a card was the superior discounts and promotions which were offered by the card issuer. Not surprisingly, main cards were used for the broadest range of transactions, while subsidiary cards were used for a more restricted range of transactions, a majority saying that their subsidiary cards were held for “stand‐by purposes”.Research...

The cashless society

The cashless society, where clumsy and expensive‐to‐handle coins and notes are replaced by efficient electronic payments initiated by various types of plastic cards is a tantalizing prospect for the twenty‐first century. Some of the interested parties stand to gain more than others if the cashless society becomes a reality. Outlines the rationale of those who are keen to promote the cashless society and the implications for marketeers charged with winning consumer acceptance for payment by plastic card. Commencing with a European‐wide view of the European plastic card market, focuses on recent developments within the UK, one of Europe′s leading countries in the use of plastic cards as a means of payment. The plastic card payment product is analysed under the three headings of pay later, pay now and pay before and a view is offered as to the future prospects for each type of plastic card in contributing to the development of the cashless society.

The adoption and usage of credit cards by urban‐affluent consumers in China

Purpose – The purpose of this paper is to present exploratory research into the holding and usage of credit cards by a distinct segment of the Chinese population, who are “early adopters” of this product.Design/methodology/approach – Primary data collection using survey methodology. A sample of the urban‐affluent population in China was utilized to gauge preferences and attitudes towards the use of credit cards.Findings – The respondents were comfortable with the holding and use of credit cards and particularly recognised their value for spending on travel and entertainment. The research also identified purchase trigger points, which indicated that the use of credit cards for purchases above certain value was already prevalent with this sample of urban‐affluent Chinese consumers.Research limitations/implications – The sample was drawn from a narrower base than the actual target population of urban‐affluent market, but an available and valid respondent set, which offers insights into the “early‐adopters” o...

Entering the market for financial services in transitional economies

Purpose – The purpose of this paper is to explore the opportunities and challenges for “foreign” financial institutions who wish to enter the Chinese market. It uses the credit card product to illustrate the complexities of this market.Design/methodology/approach – Building on a literature review of how other transitional economies have dealt with the introduction of competitive financial services into their markets, the paper uses secondary research sources to consider some of the Chinese cultural nuances about savings and consumption that foreign entrants will need to be aware of. The credit card provides a mechanism, both to better explain these nuances and to demonstrate the entry strategies used to date by foreign credit card issuers.Findings – There is much work yet to be done by the Chinese authorities to establish an infrastructure for payment cards and to encourage consumers to hold and use such cards. Foreign entrants, whilst constrained by the regulations restricting entry into the Chinese fina...

Smart cards and retailers ‐ who stands to benefit?

Explains that the smart card is increasingly being held and used by consumers in the UK, particularly in its electronic purse or loyalty card capacity. The smart card is a plastic card that carries an embedded computer chip with memory and interactive capabilities. Describes the current major payment options open to consumers, and accepted by retailers, with a review of the costs and benefits of each payment option. Considers the electronic purse pilot of Mondex as a new payment option and looks at the issues facing retailers with the introduction of smart cards. Concludes that acceptance of the smart card as a new payment option depends heavily on retailers’ attitudes and these will be formed by the so‐far unquantified balance of costs and benefits that will accompany the introduction of the smart card.

Local resistance to larger retailers: the example of market towns and the food superstore in the UK

One important arena for the study of the impact of larger retailers is, in the UK, the market town. This paper shows how locational policies of larger retailers – akin to WalMart openings in the US Midwest – are affecting these traditional towns in rural areas. The paper takes a case study approach by examining the pioneering fightback using the local loyalty card first adopted by Leominster in Herefordshire. Through time it emerges that the community has not been able to sustain its trading opposition to a large format intruder. However, its successes are noted – and study is made of copycat schemes in the UK. A paradox emerges: the most cohesive smaller communities with many independent retailers lack the resources to maintain the fight. Larger settlements can and do support more viable card schemes: but these towns (and cities) having greater populations are themselves already dominated by larger retailers.

Relationship marketing: The case of the university alumni affinity credit card

The credit card market in the UK has a growing number of affinity cards, some of which are specifically targeted at alumni associations. This article discusses the background to the affinity credit card and the rationale behind the choice by card issuers of alumni associations as affinity partners. The triangular relationship between credit card issuer, affinity group and credit card holder is then explored, within the context of the alumni affinity card, and a model is constructed which demonstrates the complexity of the relationship. The alumni affinity credit card is offered as a litmus test to the validity of relationship marketing as a new marketing paradigm.

A new relationship marketing model and its application in the affinity credit card market

To enable research to be conducted into the validity of the relationship marketing paradigm, a model has been developed which allows researchers to test the characteristics of the relationship at any point in time. This model is rooted in the biological sciences and is based around the concept of symbiosis. It has been adapted to offer a five part classification of relationships and used during an on‐going research programme into affinity credit card relationships. The results of the research indicate that the majority of the “relationship managers” employed by a sample of charities with affinity credit cards, perceive their relationship with their credit card issuer to be of equal benefit to both organisations, and thus fit the classification of the model. From the comments of the relationship managers in the research interviews there is, however, also evidence of some degrees of some of the other classifications in the proposed model of relationships.

Cards in context – the comparative development of local loyalty schemes

Over the last five years, a great deal of attention has been paid to the genesis of what have come to be termed local loyalty cards. Researches the development of the pioneering card – based in Leominster, Herefordshire. This programme of research has led to contacts with a large number of such schemes in Britain – totalling over 60. With the creation of a database of these cards it has now become possible to produce a typology of local loyalty cards. Examines the motivation to adopt and, ultimately, the process whereby individual localities came to select a particular system from the increasing range of available card systems. Also illustrates the remarkable diversity in the nature and scope of such card schemes.

Loyalty cards and the revitalisation of the town centre

The context for this paper is the growth of the out‐of‐town superstore and the subsequent decline of the town centre. It examines the development of a town centre loyalty card programme in the town of Leominster and reports on both quantitative and qualitative research carried out to assess the results of this initiative and its prospects for the future. The paper comments on the criteria that other town centre loyalty cards must consider and discusses the options available for enhancement of loyalty cards in the light of technological developments and in the context of the role that they can play in the revitalisation of the town centre.